By building on the existing review structure, the CFO ensures a strong connection between the transformation and ongoing business performance and avoids creating an additional layer of performance management. The Seven Habits of Highly Effective Digital Enterprises In defining the master plan for a global industrial company’s transformation, the CFO collaborated with the CEO to prioritize 50 improvement topics. In the past decade, it has become commonplace to see companies launch a transformation—a comprehensive change in strategy, operating model, organization, people, or processes. BCG was the pioneer in business strategy when it was founded in 1963. Chegg CFO: How Existing FinTech Partners Bolster Digital Transformation By PYMNTS 60 60 PYMNTS.com PYMNTS Posted on November 20, 2020 November 19, 2020 3:56 pm The CFO’s performance, like all members of the executive team, is measured against the success of these company-wide initiatives and plays a proactive role in driving progress. 0000001558 00000 n The transparency enabled by a culture of truthfulness provides the basis for the forward-looking decisions required to design and execute a successful transformation. If we break it down to simple terms: we have a strategy, we plan on how the strategy will be deployed, we report on an actual outcome, we analyse the outcome, and hopefully we further analyse to provide some indications of future outcomes. To facilitate frequent performance reviews and rapid course corrections, the company implemented a governance structure that enabled the CEO, the CFO, and the chief human resources officer to actively manage the improvement portfolio. 0000018981 00000 n I think one roadblock to transformation is the business functions around strategy, report, plan, and analyse. I believe the CFO-CIO relationship is a critical piece of a successful digital transformation journey. 410 0 obj 0000590849 00000 n The CFO also fostered stakeholder alignment—first by working closely with the executive team and top management and then by communicating the case for change and the improvement initiatives to the broader organization. Recognizing the challenge, the CFO framed a case for change to convince the organization that cost reduction was necessary to maintain the current rates of growth and profitability over the long term. They also need to define metrics for tracking and evaluating the impact of these changes from the perspective of value creation. This article was originally published by Financial Director on November 12, 2019. In defining the master plan for a global industrial company’s transformation, the CFO collaborated with the CEO to prioritize 50 improvement topics. 0000560473 00000 n Blog by CFO Rethink on common Accounting, Finance and Transformation solutions for SMEs and important blind spots to look out for. The CFO agenda: Digital delivered, episode 3 | Organizational agility This edition takes a deep dive into organizational agility; what it means to be an agile finance organization in the COVID-19-driven new reality and beyond, and what it takes to become one. IT leaders’ top priority … 451 0 obj 0000573805 00000 n Partner & Director, Center for CFO Excellence, Managing Director & Senior Partner; Global Leader, Center for CFO Excellence. By challenging business line leaders about value creation opportunities, the CFO helps the company develop a value-oriented vision for its target operating model. 0000001361 00000 n By Shishir Agarwal, Ketil Gjerstad, Håvard Kalland, Matthias Krühler, Marc Rodt, Alexander Roos, Teemu Ruska, and James Tucker. If you are thinking deep on some of these It’s a business process issue, and this is where the CFO is becoming integrally involved,” Goldstuck added. Only 24% of transforming companies experienced greater TSR growth than their industries over both the short term (one year) and the long term (five or more years). To ensure transparency into performance, the CFO must collaborate with other company leaders to foster a culture of truthfulness in assessing and reporting on progress. The best performers recognize that margin growth not only contributes directly to TSR but also generates cash to invest in growth opportunities and pay dividends. © Boston Consulting Group 2020. Related Expertise: Finance Function Excellence, In the increasingly digital world, the typical capital allocation process can stifle a transformation. During solution development and implementation, the CFO should assess the transformation through a value lens, especially if it is not meeting expectations for impact and project teams are not able to make course corrections to get it on track. Operations, 2018-01-26  Fortunately, today’s CFO is in a unique position to address such issues by supporting transformations on three essential fronts: CFOs’ new leadership role in corporate transformations, especially those that fo-cus on operational improvements, is a further advance in the development of their responsibilities from backward-looking reporting to forward-looking strategic support. 0000002739 00000 n BCG research has also found that value creation is highly correlated with margin expansion. Simplification in digital solutions and IT will be a gamechanger to make the company leaner and truly fit for the digital world. endobj The function’s enhanced capabilities allowed the CFO to support the business through better transparency into cost performance, capital allocation, and investment headroom. In one instance, the CFO of a US retail chain determined that the company would need to improve its margins in order to continue enjoying profitable growth. 0000599086 00000 n Partnering for Performance. Recently, a global telecom company launched a large-scale cost improvement program in response to slowing growth. We covered the first four of … They are both renowned business leaders with extensive international experience in driving business transformation. Finding the Value. 0000599333 00000 n In our survey, 60% of the finance executives said they will devote at least 20% of their finance budgets to digitally transforming the function. Understanding the sources of value creation is only the starting point. For example, an energy company reinforced the function by creating a master data system that provided a single source of truth, improving cost allocation and building skills to continually assess performance and competency gaps. In defining the master plan for a global industrial company’s transformation, the CFO collaborated with the CEO to prioritize 50 improvement topics. Our research finds, though, that many transformations do not create shareholder value. At a financial services company, the CFO supported business leaders in conducting hands-on performance reviews in which they took a forward-looking perspective on the potential benefits of a transformation they were undertaking. 0000543623 00000 n These targets not only helped to shift the mindset of company leaders but also enabled the business lines to discuss more aggressive, transformative changes. By leading the efforts to create transparency and apply a value lens, CFOs can help guide their companies to more substantial and enduring performance improvements. There is a strong case for a transformation if the company is struggling to meet shareholder expectations. Moreover, many of these companies are launching transformations in rapid succession: 73% announced two rounds of cost restructuring combined with reorganization or downsizing within two years. (See Exhibit 3.). The CFO has shifted expectations, processes and tools to best align her team’s performance to … FutureCFO.net is about empowering the CFO and the Finance Team to take on the leadership position in the digitalization of the enterprise. >> To provide a fact base, the CFO conducted a systematic appraisal of baseline performance. CFOs may need to consider funding a transformation differently, for … CFO 3.0: Beyond finance To fully understand this shift from CFO 1.0 to CFO 3.0, Sage commissioned a study, CFO 3.0 – Digital transformation beyond financial management, that helped us to identify the opportunities and Ask any CEO and nine times out of ten, you will get this answer: I want a CFO that is able to contribute in a significant manner to the corporate strategy. %PDF-1.5 CFO 3.0: Digital transformation beyond financial management is a new guide that looks at the evolution of the chief financial officer. 0000600017 00000 n Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact. endstream Stephens, who has served as CFO since joining Barnes Group in January 2009, will continue in that role until December 31, 2020 to assist in a smooth transition. (TSR is the annual percentage return to owners, which comes from capital gains plus any dividends. A year of resolution: Qualcomm CFO talks 5G, COVID-19 and digital transformation Akash Palkhiwala, CFO of Qualcomm, says COVID-19 has accelerated the adoption of … Implementing transformations and evaluating the return on investment has become increasingly complex, however. This includes exploring the critical connection points between finance and IT that can help their departments better meet business goals. So, then, how does the CFO engage in this Digital Transformation journey?The role of the CFO today is no longer confined to “keeping the books in good order” or as I like to say “running the trains on time”. And they must ensure that investors understand how the transformation will boost the company’s TSR. While […] 0000010829 00000 n Indeed, among recently launched transformations, only one in four has succeeded in creating shareholder value above the industry average. We advise those that do so to take what we call a “machine-first” approach. This entails clarifying the baseline performance, determining the right metrics for assessing value creation, and setting top-down targets. 0000002994 00000 n The finance department’s to-do list is shifting, and so is the role of the CFO. 0 0000000015 00000 n Defining the Master Plan. For many companies, operational-improvement initiatives aimed at reducing the cost base are the most effective way to increase margins. According to Sage ’s recently commissioned CFO 3.0 research, based on a survey of more than 300 South African financial decision-makers and CFOs, the role of the CFO has changed dramatically in recent years. Most recently he was CFO and chief operating officer at Qontigo and previously a CFO at Axioma. While many digital transformation project fail, there’s still hope if an organisation can ensure that six critical success factors are in place, said Boston Consulting Group recently. Successful digital transformation within the enterprise requires collaboration between CFOs and CIOs. 0000001189 00000 n 0000543134 00000 n For example, the CFO can support a new CEO or other new members of the executive team in understanding the company’s cost structure, performance development, and ongoing improvement initiatives. 0000550639 00000 n To promote progress and a sense of ownership, the CFO empowers project teams and supports them in resolving issues, making decisions, and removing obstacles. The role of today’s CFO is changing. <>/Outlines 125 0 R>> Companies must translate this knowledge into effective initiatives and allocate the appropriate resources. 0000010354 00000 n (See Exhibit 1.) It will show you how technology such as artificial intelligence and automation can help you take your finance team and your role to the next level. To enable the CFO to assume an expanded role, most companies will need to strengthen the finance function. Digital transformation in finance is reshaping the role of the CFO like never before. コーポレート・ディベロップメント, 0000572842 00000 n CFO Insights January 2020. These programs were initiated to bring about long term and persistent changes. <. CFO 3.0: How digital transformation can improve financial reporting Sage’s CFO 3.0: Digital transformation beyond financial management research revealed that nine out of 10 senior financial decision-makers in South African businesses play a vital role in their organisation’s digital transformation. For example, three-quarters of the companies we studied are investing in digital technology, a field in which they are still building the operational and financial expertise required to develop a business case for investments. 0000003778 00000 n <]/Prev 1231922 0000002138 00000 n By providing a better understanding of the status quo and improvement priorities, the results enabled the CFO to set clear top-down targets. 0000002572 00000 n One of the CFO’s primary roles is around financial disciplines and resource allocation. According to a BCG analysis, 52% of large public companies in Europe and North America announced transformations in 2016, a 42% increase compared with 2006. Automation and digital transformation continue to progress, reducing costs, improving productivity and allowing employees to leverage critical The greater scope of responsibilities makes CFOs uniquely well positioned to understand the sources of value, set fact-based improvement targets, optimize resource allocation, and ensure accountability for results. To help CFOs address the challenges of action-oriented performance management, we offer guidance on how to ensure that transformations produce value. 0000572993 00000 n 408 0 obj In fact, I partner closely with our CIO, Chris Bedi , to ensure that ServiceNow prioritizes and funds digital transformation programs that increase customer success, unlock productivity, and drive ROI. With/Afterコロナを生き抜くためのCFOアジェンダとDigital Transformation With/Afterコロナ環境下で、CFOが取り組むべき短期的・中長期的な取組み事項と、ニューノーマルの時代に目指すべき財務経理のデジタル化の方向性について解説し Furthermore, 44 percent of CFO The CFO’s Role in Business Transformation The CFO of Ricoh Americas analyzes the business transformation of the company as it changes its identity from a hardware supplier to a services provider. 0000584282 00000 n <> In the role of chief performance officer, the CFO ensures a successful transition from the definition of the master plan to the execution of it. 0000583891 00000 n 408 44 The CFO’s Vital Role in Corporate Transformation. We analyzed the sources of value creation for a sample of more than 700 large public companies in Europe and North America from 2011 through 2016. Our research and CFO Transition Labs™ have helped us identify seven major risk categories that can impede transformations. Boston Consulting Group is an Equal Opportunity Employer. 0000003516 00000 n 0000551550 00000 n If a transformation is already under way, the CFO should be alert for inflection points that could be opportunities to significantly influence the program’s impact. “What the CFO 3.0 research shows is that digital transformation is not a tech issue per se. These critical factors can reverse the odds of success from 30% to 80%, the company pointed out. Cathy was CFO of Target from 2015 to October 2019 and was a key contributor to the company’s digital transformation program. In addition, the CFO designs the governance for the transformation, aiming to provide insight into the development and maturity of projects and promote accountability. 0000600292 00000 n From start-ups to S$30 mil SMEs, you are our focus. In addition, the CFO designs the governance for the transformation, aiming to provide insight into the development and maturity of projects and promote accountability. 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